US 'super committee' on spending cuts admits it is heading for failure

The United States faces economic crisis after members of the bipartisan
congressional “super committee” given the task of finding spending cuts of
$1.2 trillion admitted on Sunday night that they are heading for failure.

Although the 12 members of the committee said they were not abandoning hope, both Democrat and Republican aides said there had been no movement yesterday towards common ground on the issues of tax rises and spending cuts and they were expected to concede defeat on Monday.

The committee, with six Republicans and six Democrats, has until Wednesday to vote on a deal, but the deadline to have a legislation written and presented to entire panel is Monday.

The committee’s main preoccupation on Sunday was to blame the other party of not being serious about reaching agreement.

Senator Pat Toomey, a Republican, told CBS: “It’s not entirely too late yet. It’s still possible to reach an agreement, but it’s going to be tough given where the clock is. It’s been enormously frustrating for me and for many of my colleagues. As I said, we’ve got 12 good people that worked hard on this.

“But on the other side, there was an insistence that we have a trillion-dollar tax increase. There was an unwillingness to cut any kind of spending at all unless there was a huge tax increase.

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“Our friend, Jim Clyburn, the congressman from South Carolina, as recently as last week said twice, in fact, that the Democrats never coalesced around any plan.”

Senator John Kerry, a Democrat, told NBC that Republicans were not telling the truth about the talks. “I say to my Republican colleagues: we are here all day. We are ready to do $1.2 trillion, not less than it. That’s what we were told to do. That’s the law.”

If no deal is reached by the super committee, automatic spending cuts are due to start in 2013, two months after presidential and congressional elections. These would be evenly divided between domestic and defence programmes.

The deadlock focuses on Republican opposition to tax increases, particularly on the wealthiest Americans, and Democratic refusal to cut into federal retirement and health care benefits without such tax increases.

Republicans want to extend tax cuts that lowered individual rates – reductions that originated under former president George W. Bush. Those tax cuts run out at the end of 2012.

Republicans have pushed for a permanent extension, while Democrats want the tax cuts for the rich to expire.

The panel was created in August out of a failure by President Barack Obama and Congress to reach a long-term deficit-reduction deal of about $4 trillion.

White House officials were conspicuously absent on the Sunday talk shows. Mr Obama, just back from a nine-day Asia-Pacific tour, has kept his distance from the deficit committee and there was no sign that he was prepared to weigh in personally in a last-ditch push for an agreement.

“Reality is, to some extent, starting to overtake hope,” said Jeb Hensarling, the panel’s Republican co-chairman.